The reason there is a terrible financial cataclysm ahead is that mainstream thinking has degenerated into outright quackery. Just read the drivel coming from financial journalists and pundits these days; and recall that the latter are little more than repeaters and amplifiers, passing along to their readers what politicians and policymakers are thinking and saying.
Take the case of Clive Crook, formerly the FT’s man in Washington and now an editorial scribbler at Bloomberg View. After lamenting the Draghi has dawdled too long getting to an aggressive QE initiative, he called out the authority of no less than Milton Friedman to justify a new absurdity in Keynesian delusion. Namely, that in dispensing trillions of new euros made out of thin air, the ECB should not simply purchase the rotten debt of Italy and the rest of the latin league; instead, it should literally mail out checks to 275 million Eurozone households and send them frolicking into the continent’s shops, stores and retail websites:
On the face of it, though, this approach would be legal. It would make Milton Friedman proud. Best of all, it’s a good idea. Fire up the helicopters!
Would that Crook were writing a parody for The Onion. But, unfortunately, the man is dead serious.
So you can either just dismiss Clive Crook and his august perch at Bloomberg View as just more mainstream claptrap or ask why in the world would a purportedly literate and long-experienced financial journalist advocate such nonsense. Really. The ECB is just supposed to send, say $500 freshly minted Euros, to every household on the continent? A central bank can actually create output and wealth by hitting the send button on its digital printing press?
Yes, indeed. Crook and perhaps many others at the great Bloomberg whirligig want the ECB to hit the printing press because by their lights Europe is tumbling into the dread disease of deflation.
